QUESTION:
We are in the middle of a hearing with a physician challenging a recommendation that some of his clinical privileges be revoked. The physician’s attorney proposed a settlement whereby the physician would accept the MEC’s recommendation in return for ending the investigation and not reporting the matter to the Data Bank. The settlement would also include mutual releases from liability. Can this be done?
OUR ANSWER FROM HORTYSPRINGER ATTORNEY DAN MULHOLLAND:
Yes, provided that the settlement is carefully structured. The Health Care Quality Improvement Act requires that accepting the surrender of clinical privileges of a physician while the physician is under an investigation or in return for not conducting such an investigation be reported to the National Practitioner Data Bank. 42 U.S.C. §11133(a)(1)(B). If a hospital fails to meet its reporting obligations, it can lose its immunity for professional review actions provided by the HCQIA. §11133(c)(2).
The NPDB Guidebook says that an investigation runs from the start of an inquiry until the hospital’s decision-making authority (in most cases, the Board) takes a final action or decides not to pursue the matter further. So, if the Board approves the proposed settlement and closes the investigation in return for the physician’s agreement to accept the recommendation that some of his privileges be revoked, the matter would not be reportable to the Data Bank since the physician would no longer be under investigation.
If it was subsequently determined by HHS that the settlement was reportable, the hospital would still have the opportunity to cure the alleged violation and avoid sanctions by reporting either or both actions at that time. The regulations implementing Data Bank reporting obligations, at 45 C.F.R. §60.12(c)(1), say:
“If the Secretary has reason to believe that a health care entity has substantially failed to report information in accordance with this section, the Secretary will conduct an investigation. If the investigation shows that the health care entity has not complied with this section, the Secretary will provide the entity with a written notice describing the noncompliance, giving the health care entity an opportunity to correct the noncompliance, and stating that the entity may request, within 30 days after receipt of such notice, a hearing with respect to the noncompliance.”
Therefore, you should consider putting language in any final settlement agreement to permit the hospital to make a report if the HHS subsequently determines that the hospital was not in compliance with its reporting obligations. You should also check any applicable state law reporting obligations which might differ than those of the NPDB.
If you have a quick question about this, e-mail Dan Mulholland at DMulholland@hortyspringer.com.